The Westpac Banking Corp (ASX: WBC) share price is struggling to stay in the green today. This follows an update from the Australian Securities and Investments Commission (ASIC) revealing a further $561 million in fee for no service refunds made by ASX-listed financial shares.
At the time of writing, shares in Australia’s oldest bank are relatively flat at $24.87 apiece, up just 0.12%.
The Westpac share price is also underperforming its peers so far today, with Commonwealth Bank of Australia (ASX: CBA) shares currently up by 1.14%. Westpac shares have, however, gained almost 50% over the past 12 months.
It comes at a cost
According to the ASIC release, six of Australia’s largest banking and financial services institutions have paid or offered an additional $561 million in compensation because of fees for no service or non-compliant advice. This includes the big four banks, as well as Macquarie Group Ltd (ASX: MQG) and AMP Ltd (ASX: AMP).
As a result, the total tally paid by the banks has swelled to $1.86 billion as at 30 June 2021. A figure that has been growing since the findings of the Hayne banking royal commission.
The corporate regulator’s update shows that Westpac forked out a further $388.6 million in the front half of 2021. This increase means the bank is second only to NAB for the highest amount of compensation paid, currently pegged at roughly $630 million. Certainly not a podium finish that is doing the Westpac share price any favours today.
Intriguingly, the number of customers slated for compensation from Westpac is nearly one-tenth that of the National Australia Bank Ltd. (ASX: NAB). This means the average compensation claim from Westpac customers is much higher.
Also not helping the Westpac share price
As we covered earlier today, Westpac’s review of its partnership with Afterpay Ltd (ASX: APT) due to the proposed acquisition of Afterpay by Square (NYSE: SQ) might be weighing on the Westpac share price today.
A banker from Westpac said the company will be “thinking through the strategic implications given Square’s interest in merchant acquiring and business loans”.
The Westpac share price is underperforming the broader S&P/ASX 200 Index (ASX: XJO) today. While the bank’s shares are barely breaking even, the index is up 0.22% in afternoon trade.